The other day we posted our monthly online tools roundup and mentioned Mint.com. Today there was an interesting post from the founder of Mint on TechCrunch about using the data that they have collected over the past year to assess the health of the economy.
Looking across spending as a whole in 2008, we can see a phase change beginning in the summer. After a bump in the May/June time frame from tax refunds and credits, we see spending declined by $400 / month / household. Spending eroded even further (a $200 drop) in November along with consumer confidence, bouncing back only slightly for the holidays.
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Is it Great Depression bad? That’s a qualitative question I can’t answer. But what the data, the hard facts, mean for you – if you run a consumer business – is that your customers are spending $400 less each month than they were a year ago, have burned through half of their savings, and on average have taken on an additional $5k in debt.
Good decisions are based on good data. And data – in itself – may be one of the most valuable by-products of any startup.
I don’t know if this would withstand academic scrutiny, but it is interesting that a service like Mint can provide statistics on cosumer spending with such accuracy.
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As a small business owner and consumer with a family, I’d say the data is right on. We all know retail is down but to get a number as specific as $400 per household is pretty amazing.
Our household cut service expenses (tv, extra phone service, and certain web services). These come to just under $200 savings but our other retail spending has easily been reduced by at least $200. We’ve completely cut eating out, which would probably bring us to the $400 mark.
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More reasons web applications should be used with caution because clearly they cannot resists the temptation to data mine.